Ripple CTO Emeritus Blasts $286B Bitcoin Lawsuit Against Satoshi, Dormant Wallets

A recent New York lawsuit for Bitcoin ownership of billions of dollars has drawn criticism from Ripple CTO Emeritus David Schwartz for its questionable reasoning. Ripple CTO Emeritus David Schwartz criticized the suit for claiming BTC belonging to Bitcoin creator Satoshi Nakamoto and the Mt. Gox hack.

What Is The Bitcoin Lawsuit About?

Noah Doe filed the lawsuit along with Wyoming-based companies ABC Company and XYZ Company. It requests a New York court to award them control of 39,069 inactive Bitcoin wallets. These addresses reportedly contain an estimated $286 billion worth of Bitcoin, or approximately 3.7 million BTC.

Under New York law, the plaintiffs say the wallets are abandoned property because they discovered a flaw that rendered it impossible for the owners to be able to use it at all. The dormant addresses were reported to the New York Police Department so they should be handled like unclaimed bank accounts or lost property, the filing says.

Included among the addresses in the 901-page declaration are wallets that are tied to Satoshi Nakamoto. In addition, it mentions the “1Feex” wallet linked to Mt. Gox hack.

Schwartz literally dismissed the foundation of this lawsuit. He wrote on X, “The most serious flaw in the suit is that jurisdiction is supposedly based on the fact that ‘the found property that is the subject of this suit is situated here.'”

Ripple CTO Emeritus Offers His Take On The Case

Also, Ripple’s Schwartz responded to important inquiries on social media. The case would have major jurisdictional challenges if it was possible to conclude the wallets were abandoned.

“There are many significant legal problems with the suit,” Ripple’s Schwartz wrote. He added, “For one thing, there’s no basis for the court to have jurisdiction. The logic that the property was found in the state of NY is comically bad.”

Although he rejected the legal arguments surrounding the suit, things remain wary. Schwartz stated that it may still pose practical problems for Bitcoin users in the event of a victory in court.

“The problem is that bad things can still happen,” he said. The Ripple CTO Emeritus added, “Suppose they get a ruling in their favor and someone moves funds from one of these wallets to a US exchange. These guys would likely ask the exchange to freeze the funds on the theory that the funds belong to them.”

If the decision is legally flawed, it could cause problems if not challenged in time before a court, Schwartz added.

“Even though the NY ruling should be considered void ab initio due to no jurisdiction, it’s not entirely inconceivable that a US court may find that due to the passage of time, the claim that the ruling is void was procedurally defaulted,” Ripple’s Schwartz remarked.

If that’s the case, he continued that plaintiffs could “conceivably, wind up stealing people’s crypto.”

“I really hope that somebody is taking this case seriously,” the Ripple CTO Emeritus concluded.

Earlier, the new Bitcoin hard fork proposed by LayerTwo Labs CEO Paul Sztorc also posed risk to Satoshi’s BTC. It aimed to seize the Bitcoin creator’s 1.1 million BTC but Sztorc chucked off that possibility later on.

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